By: Richard L. Smith
U.S. Attorney Philip R. Sellinger said Jorge Fernandes, 76, of West Orange and the former 50-percent owner of two well-known restaurants in Newark, has pleaded guilty to failing to withhold and pay over payroll taxes.
Fernandes appeared before U.S. District Judge Christine P. O'Hearn and admitted guilt to two counts of failing to collect payroll taxes for the tax period spanning 2016 through 2017.
The case documents and court statements reveal the following:
As the co-owner of Iberia Tavern and Iberia Peninsula, located in the Ironbound section of Newark, Fernandes was fully aware of his legal obligation to collect payroll taxes from the restaurant employees.
However, instead of fulfilling this duty, he chose to pay some of the employees "off the books" or "under the table," intentionally evading the payment of any payroll taxes.
This fraudulent scheme resulted in a staggering total tax loss of $715,780 for the tax years 2016 through 2017.
The charges of failing to collect payroll taxes, to which Fernandes pleaded guilty, carry severe consequences. Each count could lead to a maximum penalty of five years in prison and a fine of up to $10,000.
The sentencing for Fernandes is scheduled for November 20, 2023.
In recent developments, Fernandes has decided to permanently close both restaurants following the investigation and charges.
The U.S. Attorney's Office and other agencies remain committed to ensuring that all individuals and businesses comply with their tax responsibilities.
"This case highlights the importance of reporting income accurately and paying the appropriate taxes, as required by law," officials said.